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Description: The Capacity Building Update series is designed to keep workforce development professionals and other stakeholders informed of the various system-building projects sponsored by the Office of Employment and Training Programs (OETP) and the other Employment and Training Administration (ETA) initiatives. This issue addresses the Quality Forum, an umbrella organization created to improve services to customers by promoting quality practices and continuous improvement in workforce development programs and initiatives. The Capacity Building Update is issued regularly to ensure that timely information about these projects is available to the employment and training community. The publication is available electronically on ETA's home page on the Internet under the System Building section, in a format that reflects the look and feel of the original document. The text version can be accessed through the Training Technology Research Center (TTRC) . The publication will be updated electronically as developments warrant. Another print edition is expected to be available early next year. Distribution: Copies of the Capacity Building Update will also be distributed to: ETA Regional Offices, State Training Institutes, State Training Coordinators, and other stakeholders. Action Required: Please distribute this publication to interested individuals and make it available at meetings and gatherings likely to be attended by workforce development system partners and customers.

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References: JTPA Title II Eligibility Documentation, A Technical Assistance and Training Series, U.S. Department of Labor, Employment and Training Administration, TEIN No. 22-92, Change 4; TEIN No. 1-95--Capacity Building: Distribution of Multimedia JTPA Title II Eligibility Documentation Training Module. Background: The Department was recently informed that the Cloverdale Amendment prohibits the use of a voter registration card as proof of citizenship. This obscure amendment is included in the "The Balanced Budget Downpayment Act I." Accordingly, Section 117 under Title I of the Amendment enacts by reference legislation which states that "Notwithstanding any other provision of law, a Federal, State or local government agency may not use a voter registration card (or other related document) that evidences registration for an election for Federal office, as evidence to prove United States citizenship." Current instructions permit the use of a voter registration card for proof of citizenship status as well as for proof of residency. The enactment of the Cloverdale Amendment, supersedes all current instructions in the Job Training Partnership Act (JTPA) eligibility TAG which reference the voter registration card as acceptable documentation for citizenship verification. While the card is still acceptable as proof of residency, it is no longer acceptable as proof of citizenship for eligibility for JTPA programs. Therefore, other sources of documentation listed to establish citizenship proof should be used for determining eligibility. Action: Inform all TAG holders to delete all references to the voter registration card which currently appear on pages II-2, IV-3, 8, 12, 18, 23, 27, and VI pages A1-1, D-3, and D-4.

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References: OMB Circular A-133, as revised April 30, 1996; Single Audit Act, as amended July 5, 1996 (P.L. 104-156). Background: A proposed revision to OMB Circular A-133 was published in the Federal Register on March 17, 1995; the final revision to the circular was published on April 30, 1996. The revised circular continues to apply only to institutions of higher education and non-profit organizations, including hospitals. The effective date of this circular is July 1, 1996, and applies to audits of fiscal years ending on or after June 30, 1997. The circular was written in such a way that after amendment of the Single Audit Act, it could be easily adapted to accommodate the provisions of the amendments. The intent was to make one law and circular applicable to both State and local governments and non-profit organizations. The amendments to the Single Audit Act were signed by President Clinton on July 5, 1996. As a result of these amendments, the requirements of OMB Circular A-128, which apply to State and local governments, will be rescinded, and its applicable requirements will be folded into OMB Circular A-133. OMB issued, in the November 5, 1996 Federal Register, a proposed, newly revised OMB Circular A-133, applicable to non-profits and State and local governments, which combines OMB Circulars A-128 and A-133. Comments are due to OMB by January 6, 1997. Summary: Following is an outline which summarizes the requirements of the revised circular. Significant changes from previous requirements are in bold type. Audit threshold increased from $25,000 to $300,000 Determination of major high risk programs no longer based solely on level of expenditures. Now they are determined by the auditor based on: Risk Assessment Prior audit experience Oversight performed by the Federal agency and others Inherent risk of the Federal program Assignment of Federal cognizant agency is now based on a dollar threshold of awards received, not by OMB. Auditee Responsibilities Identify and account for Federal awards Maintain internal controls over Federal awards Comply with laws, regulations and contracts Prepare required financial statements, etc. Ensure that A-133 requirements are met Follow-up and resolve audit findings Auditors The auditor that does the audit shall not prepare the auditee's indirect cost proposal or cost allocation plan, when indirect costs exceed $1 million in the prior year. (This is in affect on audits of fiscal years ending on or after June 30, 1999.) The Single Audit Act amendments will require the auditor to express an opinion on whether the schedule of expenditures of Federal award is fairly presented in all material aspects in relation to the financial statements. Reporting Reports must be submitted no later than nine months after the end of the year audited, or within 30 days after issuance of the auditor's report to the auditee, whichever is earlier. This will be transitioned in over a two year period. Auditee Reporting Requirements Financial statements Schedule of Federal awards expenditures Summary schedule of prior audit findings Includes status of all findings included in the auditor's prior year schedule of findings and questioned costs of Federal award Includes status of findings reported in the auditee's prior year summary schedule of prior findings until resolved or no longer valid. To be consider no longer valid, the following must apply: Two years have passed since the finding was reported; Grantor is not currently pursuing; and No management decision was issued Corrective action plan, where the auditor identifies audit findings for: Material noncompliance with individual compliance requirements for a major program; or Material weaknesses in the auditee's internal controls Data collection form Audit Costs Single Audit Act amendments establish the requirement that the percentage of the audit costs charged to Federal awards generally cannot be greater than the ratio of the entity's Federal awards expended to its total expenditures. A greater percentage can be charged only if the entity can demonstrate that the cost of auditing the Federal awards was higher If an entity expends less than $300,000 (or higher if the threshold is raised) in Federal awards, they may not charge single audit costs to the Federal awards. They may be allowed to charge the cost of limited scope audits to monitor subrecipients. Action Required: Please share these changes with appropriate staff. Comments on the proposed revisions of OMB Circular A-133 should be sent to OMB by no later than January 6, 1997.